[Congressional Record (Bound Edition), Volume 151 (2005), Part 10]
[Senate]
[Pages 14050-14054]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                  IRAQ

  Mr. KENNEDY. Mr. President, this morning in the Armed Services 
Committee, Secretary Rumsfeld and Generals Myers, Casey, and Abizaid 
briefed us on the status of the war effort.
  Secretary Rumsfeld said, once again, that it is a tough road ahead 
but that we must persevere and he sees reasons to be hopeful. Secretary 
Rumsfeld was describing a different war than most persons are concerned 
about. The war in Iraq they see is one of mistake after mistake after 
mistake. Whatever our position on the Iraq war, we should all be 
concerned that the administration has not handled it competently.
  Secretary Rumsfeld needs to see what the American people see very 
clearly: The President does not have a winning strategy in Iraq. Our 
troops have been asked to do more with less. Our current strategy isn't 
working and the Congress and the American people know it.
  Secretary Rumsfeld insists today that it is false to say the 
administration is painting a rosy picture. But that is exactly what he 
continues to do. It is time for Secretary Rumsfeld to take off his 
rose-colored glasses and admit to the American people and to our men 
and women in uniform who are paying the price with their lives for its 
failures that he had no realistic strategy for success.
  It is time to level with the American people instead of continuing to 
paint an optimistic picture that has no basis in reality because of his 
failed strategy. And it is time for Secretary Rumsfeld to resign.
  Despite the elections last January and the formation of a new 
transitional Iraqi government, many are increasingly concerned that the 
administration has no effective or realistic plan to stabilize Iraq. It 
continues to underestimate the strength and the deadly resilience of 
the Iraqi insurgency and it has failed shamefully to adequately protect 
our troops. More than 1,700 American service men and women have been 
killed in Iraq so far and over 13,000 more have been wounded. The 
families of these courageous soldiers know all too well that the 
insurgents are not desperate or dead-enders or in their last throes, as 
administration officials have repeatedly claimed.
  Instead, General Casey indicated that the insurgency is around 26,000 
strong, an increase over the 5,000 the Pentagon believed were part of 
the insurgency 1 year ago.
  As General Myers said in April, the capacity of the insurgents ``is 
where they were almost a year ago.'' General Abizaid told the committee 
today that the overall strength of the insurgency is ``about the same 
as it was'' 6 months ago. Looking ahead, as General Vines said this 
week, ``I'm assuming that the insurgency will remain at about its 
current level.''
  In the last 2 months, America has lost an average of three soldiers a 
day in Iraq, and no end is in sight. As General Myers said on May 12.

       I wouldn't look for results tomorrow . . . One thing we 
     know about insurgencies is that they last from . . . three, 
     four years to nine years.

  Because of the war, our military has been stretched to the breaking 
point.
  The Department of Defense has had to activate a stop-loss policy, to 
prevent service members from leaving the military as soon as they 
fulfill their commitment.
  Nearly 50 percent of the persons serving in the regular Armed Forces 
have been deployed to Iraq or Afghanistan since December 2001, and 
nearly 15 percent of them have been deployed more than once.
  Thirty six percent of all those serving in the Armed Forces, 
including in the National Guard and the Reserves, have been deployed to 
Iraq or Afghanistan of since December of 2001.
  The alarm bell about the excessive strain on our forces has been 
ringing for at least a year and a half. In January 2004, LTG John Riggs 
said it bluntly:

       I have been in the Army 39 years, and I've never seen the 
     Army as stretched in that 39 years as I have today.

  As LTG James Helmley, head of the Army Reserve, warned at the end of 
2004, the Army Reserve ``is rapidly degenerating into a `broken' 
force'' and is ``in grave danger of being unable to meet other 
operational requirements.''
  These continuing deployments are taking their toll not only on our 
forces in the field but also on their families here at home. The 
divorce rate in the active-duty military has increased 40 percent since 
2000.
  The war in Iraq and the casualties and the strain on families have 
seriously undermined the Pentagon's ability to attract new recruits and 
retain members already serving. Both the Regular and Reserve components 
of the Armed Forces are increasingly unable to meet recruitment goals. 
MG Michael Rochelle, head of the Army Recruiting Command, stated the 
problem succinctly in May when he said that this year is ``the toughest 
recruiting climate ever faced by the all-volunteer Army.''
  In March, the Pentagon announced it was raising the maximum age for 
Army National Guard recruits from 34 to 39, and was also offering 
generous new health benefits for Guard and Reserve members activated 
after the September 11 terrorist attacks.
  Despite these facts, Secretary Rumsfeld insisted today that we will 
not have a broken Army as a result of the war.
  The severe strain the war is placing on our Armed Forces and on our 
ability to protect our national security interests in other parts of 
the world concerns us all.
  The Army has been forced to go to all-time new lengths to fill its 
ranks. In May, it began offering a 15-month active duty enlistment, the 
shortest enlistment tour in the history of the Army.

[[Page 14051]]

  To recruit and retain more soldiers, the National Guard has increased 
its retention bonus from $5,000 to $15,000. The first-time signing 
bonus has gone up from $6,000 to $10,000. GEN Steven Blum, Chief of the 
Army National Guard, said:

       Otherwise, the Guard will be broken and not ready the next 
     time it's needed, either here at home or for war.

  We all know that these problems of recruiting and retention cannot be 
fixed through enlistment bonuses, health benefits, and raising the age 
of service. These are short-term Band-Aids on the much larger problem 
of the war. Only progress in bringing the war to an honorable 
conclusion will lead to a long-term solution to the problem which is 
clearly undermining our ability to respond to crises elsewhere in the 
world.
  Despite claims by the administration of progress, Iraq is far from 
stable and secure. We have made very little progress on security since 
sovereignty was transferred to the interim Iraqi Government 1 year ago.
  Today, Secretary Rumsfeld insisted we are not stuck in a quagmire in 
Iraq. He insisted that ``the idea that what's happening over there is a 
quagmire is so fundamentally inconsistent with the facts.'' What planet 
is he on? Perhaps he is still living in the ``Mission Accomplished'' 
world.
  By last June, 852 American service members had been killed in action. 
Today, the number has doubled to more than 1,700.
  By last June, 5,000 American service members had been wounded in 
action. Today, the number has more than doubled, to over 13,000.
  DIA Director Admiral Jacoby told the Armed Services Committee in 
March that:

     the insurgency in Iraq has grown in size and complexity over 
     the past year. Attacks numbered approximately 25 per day one 
     year ago.

  Just last week, General Pace said:

       the numbers of attacks country-wide in Iraq each day is 
     about 50 or 60.

  A year ago, the United States had 34 coalition partners in Iraq. Nine 
of those partners have pulled out in the past year. Today, we have just 
25. By the end of the year, another five countries that are among the 
largest contributors of troops are scheduled to pull out.
  One year ago, 140,000 American troops were serving in Iraq. Today, we 
have the same number of troops.
  The training of the Iraqi security forces continues to falter. The 
administration still has not given the American people a straight 
answer about how many Iraqi security forces are adequately trained and 
equipped. They continue to overestimate the number of Iraqis actually 
able to fight. In the words of the General Accounting Office:

       U.S. government agencies do not report reliable data on the 
     extent to which Iraqi security forces are trained and 
     equipped.

  In February last year, Secretary Rumsfeld preposterously said:

       We accelerated the training of Iraqi security forces, now 
     more than 200,000 strong.
  In fact, the numbers of Iraqis who are adequately trained is far, far 
lower. As General Meyers conceded a year later, only about 40,000 Iraqi 
security forces ``can go anywhere and do anything.''
  It is still far from clear how many Iraqi forces are actually capable 
of fighting without American help and assistance.
  Our reconstruction effort has faltered as well over the last year--
and faltered badly. The misery index in Iraq continues to rise. As of 
June 15, only $6 billion--one third--of the $18 billion provided by 
Congress last summer for Iraq reconstruction had been spent.
  The Iraqi people desperately need jobs. But we are unable to spend 
funds quickly, because the security situation is so dire. Of the amount 
we do spend, it is far from clear how much is actually creating jobs 
and improving the quality of life. We need greater focus on small 
projects to create jobs for Iraqis, not huge grants to multinational 
corporations that create more profits for corporate executives than 
stability in Iraq.
  By the State Department's own accounting, up to 15 percent of 
reconstruction funding is being used to provide security for the 
reconstruction. That estimate itself may be too low. A Department of 
Energy analysis this month says that perhaps 40 percent or more is 
actually being spent on security, as opposed to actual reconstruction.
  These costs have increased--not decreased--over the past year as 
insurgent attacks have continued to escalate. We are spending ever-
increasing amounts of assistance on security to guard against an 
insurgency that the Vice President insists is in its last throes.
  A joint survey by the United Nations Development Program and the 
Iraqi Government released last month shows Iraq is suffering from high 
unemployment, widespread poverty, deteriorating infrastructure, and 
unreliable water, sewage, sanitation, and electricity services--despite 
its immense oil wealth and access to water.
  Estimates of the number of unemployed range between 20 and 50 percent 
of the population. Every unemployed person is ripe for recruiting by 
the insurgents, who offer as little as $50 a person for those willing 
to plant explosives on a highway or shoot a policeman.
  Iraq still suffers heavily from severe electricity shortages. 
According to the Department of Energy assessment, the causes are 
numerous, ``including sabotage, looting, lack of security for workers, 
disruptions in fuel supplies . . .''
  A year ago, Iraqis had an average of 12 hours of electricity per day. 
Today, they have just over 10 hours a day.
  Almost all of Baghdad's households suffer from an unstable supply. In 
parts of the city, electricity is turned on for 3 hours and then turned 
off for 3 hours. As a result, 29 percent rely on private generators for 
electricity. In areas with high incidences of poverty, many families 
have no alternative supply to turn to.
  Water and sanitation are enormous problems as well. Just this week, 
water was unavailable in many parts of Baghdad because insurgents blew 
up the water pipes.
  According to the United Nations Development Program, only 54 percent 
of families in Iraq have safe drinking water, and 80 percent of 
families in rural areas use unsafe drinking water.
  What happened to all of the oil that was supposed to pay for the 
costs of reconstruction and drive the recovery of Iraq's economy? Last 
year, the Iraqi Oil Minister said that 642 attacks on the oil system 
had cost the economy $10 billion. In 2005, pipelines are still under 
attack, and analysts believe it will be 2 to 3 years before Iraq is 
able to increase its oil production.
  The administration has been consistently wrong about Iraq. They 
wrongly insisted there was no guerilla war. They repeatedly--and 
wrongly--called the insurgents dead-enders who are in their last 
throes. They repeatedly--and wrongly--sent our service men and women on 
patrol without proper armor, a shortage that continues with the marines 
even today. When Secretary Rumsfeld was challenged about it by a 
soldier, to huge applause from the troops, on the Secretary's visit to 
Iraq last December, he responded:

       You go to war with the army you have. They're not the army 
     you might want or wish to have at a later time.

  That response from the troops says it all. Surely, no Secretary of 
War or Secretary of Defense in our history has ever been so humiliated 
by his troops or received such a resounding vote of no confidence.
  The Secretary's failed strategy has created an impossible situation 
for our forces. The administration has undermined our national security 
and undermined our ability to protect our national security interests 
elsewhere in the world.
  Our colleague, Senator Hagel, summed it up brilliantly when he told 
U.S. News and World Report last week:

       Things aren't getting better; they're getting worse. The 
     White House is completely disconnected from reality . . . 
     It's like they're just making it up as they go along. The 
     reality is that we're losing in Iraq.

  Mr. President, next Tuesday marks the 1-year anniversary of the 
transfer of sovereignty in Iraq, and to mark the occasion, President 
Bush will address the Nation.

[[Page 14052]]

  When he does, all of us hope that he will state a new, more realistic 
and more effective strategy for the United States to succeed in Iraq.
  The war has clearly made America less safe in the world. It has 
strengthened support for al-Qaida and made it harder to win the real 
war against terrorism--the war against al-Qaida.
  The President needs an effective strategy to accelerate the training 
of a capable Iraqi security force.
  The President needs an effective strategy to rescue the faltering 
reconstruction effort and create jobs and hope for the Iraqi people, 
and neutralize the temptation to join the insurgents.
  The President needs an effective strategy for serious diplomacy to 
bring the international community into Iraq, to support the adoption of 
a constitution that protects all the people of Iraq.
  He needs an effective strategy to repair the damage the war has 
caused to our reputation in the world and to our military. Our men and 
women in uniform deserve no less.
  We are muddling through day by day, hoping for the best, and fearing 
the worst. Our men and women in uniform deserve better--and so do the 
American people.


                                ASBESTOS

  Mr. SPECTER. Mr. President, I have sought recognition to talk briefly 
about the contents of S. 852 to provide for asbestos reform. This is a 
subject which has been before the Senate in one way or another for the 
better part of two decades. I recall my first contact with the issue 
when then-Senator Gary Hart of Colorado was soliciting members of the 
Judiciary Committee because of the deep problems of Johns- Mansville.
  The Supreme Court of the United States, on a number of occasions, has 
importuned the Congress to take over the subject because the asbestos 
cases are flooding the courts and because class actions are 
inappropriate to address the issue.
  The result of the avalanche of asbestos litigation has seen some 77 
companies in the United States go into bankruptcy and thousands of 
people suffering from asbestos-related injuries--mesothelioma, deadly 
diseases--and unable to collect any compensation because of the fact 
their employers or those who would be liable for their injuries are in 
a state of bankruptcy.
  Senator Hatch took the lead as chairman of the Judiciary Committee in 
the 108th Congress in structuring a bill which created a trust fund 
which has been established at $140 billion to pay asbestos victims. 
This is a sum of money which has been agreed to by the insurance 
companies and by the manufacturers and had the imprimatur of the 
leadership of the Senate.
  In the fall of last year, 2004, Senator Frist and Senator Daschle 
came to terms as that being a figure which would take care of the 
needs. The victims have never been totally satisfied with that figure, 
but it represents a very substantial sum, obviously, and according to 
the filings of the Goldman Sachs analysis, should be adequate to 
compensate the victims.
  They made a detailed analysis and came to the conclusion that $125 
billion was the figure necessary. Then when we removed the smokers, a 
figure of $7 billion, it came to a net of $118 billion, leaving a 
substantial cushion between $118 billion on the projection and $140 
billion.
  When the bill was passed out of the Judiciary Committee in late July 
of 2003, largely along party lines, the aid of a senior Federal judge 
was enlisted to serve as a mediator. Chief Judge Edward R. Becker had 
taken senior status the preceding May and was willing to convene the 
parties, the so-called stakeholders, in his chambers in Philadelphia in 
August of 2003. He brought together the insurers, the trial lawyers, 
the AFL-CIO representing claimants, and the manufacturers, a group of 
four interest groups who are very powerful in our community.
  From those two meetings, there have been a series of approximately 40 
conferences in my offices where we have worked through a vast number of 
problems where I think we have accommodated many of the interests.
  In May, the Judiciary Committee voted the bill out of committee on a 
13-to-5 vote, with bipartisan support, and during the course of the 
markup some 70 amendments were agreed to. There are still some 
outstanding issues, but we have been soliciting cosponsors and have 
found very substantial interest in the Senate on trying to move through 
legislation on this important issue. There is no denial that this is a 
very major national problem. There is no denial that there are many 
victims of asbestos who are now destitute because the people who were 
responsible for their damages have gone into bankruptcy. There is no 
denial that there has been a tremendous drain on the U.S. economy and 
that if we could solve this issue it would be a bigger boost to the 
economy than a gigantic tax break or most any other remedy which might 
be found to stimulate our economy.
  There are, obviously, risks in any bill. We have worked through the 
complexities of a startup procedure where the people who have exigent 
claims--that is, where they may die within a year--we have an elaborate 
system of offers and inducements to try to settle those cases within a 
brief period of time, some 9 months. Obviously, we cannot have a stay 
of judicial proceedings forever, so there has to be some resort to the 
courts if we are unable to get the program set up.
  Without going into greater detail, we have worked assiduously to try 
to resolve this issue. We either have it solved or are very close to a 
solution. We have worked through complex questions on subrogation, 
complex questions on the Federal Employers Liability Act, and there are 
still ongoing decisions with a controversy as to how the $90 billion 
will be divided up among the manufacturers. That essentially is the 
question that only the manufacturers themselves can guarantee.
  Similarly, there are issues as to how the $46 billion will be divided 
up among the insurers. Candidly, the insurance industry is split on the 
issue, but we are still working, and I have meetings in the course of 
the next week to 10 days with people who have outstanding concerns to 
try to resolve those issues.
  When the vote came out of committee, some of those who voted in favor 
of the bill did so with reservations. We have worked through this, and 
I think those issues are either resolved or resolvable.
  Senator Leahy and I have worked very closely. It is a bipartisan bill 
which had the 10 members of the Judiciary Committee on the Republican 
side voting in favor--to repeat again, subject to some reservations--
and three Democrats voting in favor of the bill. Senator Leahy and I 
are determined to retain our core provisions, but we are open to 
suggestions.
  It is my hope that this bill will come to the Senate right after the 
Fourth of July recess. That, of course, is a decision which the 
majority leader has to make in setting the calendar. There is a 
momentum in hand where it would be very much in the national interest, 
for the reasons I stated, to move ahead.
  I ask unanimous consent that the text of the Dear Colleague letter 
sent by Senator Leahy and myself to Members of the Senate be printed in 
the Record at the conclusion of my presentation.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                      U.S. Senate,


                                   Committee on the Judiciary,

                                    Washington, DC, June 22, 2005.
       Dear Colleague: We write to detail the problem our nation 
     now faces with the asbestos crisis and to inform you on the 
     substance of Senate Bill 852, the Fairness in Asbestos Injury 
     Resolution Act of 2005, which was voted out of committee on 
     May 26 with a bipartisan 13-5 majority. We urge you to 
     support this bill, and reiterate our interest in working with 
     you to improve this legislation while preserving its core 
     provisions. This is more detailed than the customary ``Dear 
     Colleague'' letter, but we felt this extensive discussion was 
     necessary because of the complexities of the issues and 
     proposed legislation.


                              Introduction

       The asbestos issue has been before the Senate Judiciary 
     Committee for more than twenty years, since Senator Gary Hart 
     of Colorado sought the assistance of Judiciary Committee 
     members in enacting federal legislation to address Johns-
     Manville's asbestos claims.

[[Page 14053]]

       Since that time: asbestos litigation has overwhelmed both 
     federal and state court systems; 77 companies have gone into 
     bankruptcy, with more on the brink, due to the rising tide of 
     asbestos claims; and thousands of impaired asbestos victims 
     have received pennies on the dollar since many of the 
     companies liable for their exposure have gone into 
     bankruptcy.
       Since the 1980's, the number of asbestos defendants has 
     risen from about 300 to more than 8,400, spanning 
     approximately 85 percent of the U.S. economy. As a result, 
     some 60,000 workers lost their jobs. Employees' retirement 
     funds have shrunk by an estimated 25 percent. This is a 
     problem that extends beyond the victims of asbestos disease 
     alone. It has a growing impact on the average American and 
     little question remains that it is a crisis of serious 
     proportions.


                 The Courts Enlist the Help of Congress

       In 1997, the Supreme Court commented for the first time on 
     the growing asbestos problem by stating (in the context of 
     holding that asbestos litigation was not susceptible to class 
     action treatment):
       The most objectionable aspects of this asbestos litigation 
     can be briefly summarized: dockets in both federal and state 
     courts continue to grow; long delays are routine; trials are 
     too long; the same issues are litigated over and over; 
     transaction costs exceed the victims' recovery by nearly two 
     to one; exhaustion of assets threatens and distorts the 
     process; and future claimants may lose altogether. . . .
       Given the escalating problem, the Supreme Court has 
     repeatedly called upon Congress to act through national 
     legislation: ``[T]he elephantine mass of asbestos cases . . . 
     defies customary judicial administration and calls for 
     national legislation.'' The current asbestos crisis ``cries 
     out for a legislative solution.'' ``Members of this Court 
     have indicated that Congress should enact legislation to help 
     resolve the asbestos problem. Congress has not responded.'' 
     As recently as 2003, the high court observed that ``this 
     Court has recognized the danger that no compensation will be 
     available for those with severe injuries caused by asbestos . 
     . . It is only a matter of time before inability to pay for 
     real illness comes to pass.''


                          The 2005 Rand Report

       On May 10, 2005, the Rand Corporation issued a report 
     highlighting the problems that many asbestos victims face in 
     today's tort system. In addition to discussing the number of 
     corporate bankruptcies, and other alarming economic 
     consequences of asbestos liability, the report summarized the 
     average disbursements on asbestos payments to claimants for 
     the year 2002, the most recent year available: Asbestos 
     victims filing claims receive an average of forty-two (42) 
     cents for every dollar spent on asbestos litigation; Thirty-
     one (31 cents) cents of every dollar have gone to defense 
     costs; and Twenty-seven (27 cents) cents have gone to 
     plaintiffs attorneys and related court cost.


                 Legislative History Leading to S. 852

       The current bipartisan bill is the product of years of 
     negotiations, discussion, and compromise. On May 22, 2003, 
     then-Chairman Hatch introduced S. 1125, the Fairness in 
     Asbestos Injury Resolution Act of 2003. He deserves great 
     credit for establishing in that bill a national trust fund 
     with a schedule of payments, analogous to workers' 
     compensation. We have built on that aspect of S. 1125, ever 
     mindful that the primary objective of legislation must be to 
     ensure fair and timely compensation to victims of asbestos 
     disease.
       In July 2003, the Judiciary Committee voted out S. 1125, 
     largely along party lines, in an effort to move the 
     legislation forward. However, the bill foundered on 
     unresolved issues. In August, Judge Edward R. Becker, who had 
     recently taken senior status after being Chief Judge of the 
     Third Circuit, and having authored the opinion in the 
     asbestos class action suit which was affirmed by the U.S. 
     Supreme Court, convened a two-day conference in 
     Philadelphia--with manufacturers, labor (AFL-CIO), insurers, 
     and trial lawyers to determine if some common ground could be 
     found. Subsequently, from September 2003 through January 
     2005, we held 36 stakeholder meetings here, with Judge Becker 
     as a pro bono mediator. These meetings were usually attended 
     by at least 25 stakeholder representatives with as many as 75 
     representatives attending on some occasions. These 
     stakeholder sessions have included many Senators, as well the 
     staffs of Senators Feinstein, Carper, Cornyn, DeWine, Ben 
     Nelson, Baucus, Biden, Chambliss, Craig, Dodd, Durbin, 
     Feingold, Graham, Grassley, Kennedy, Kohl, Kyl, Landrieu, 
     Levin, Lincoln, Murray, Pryor, Schumer, Sessions, Snowe, 
     Stabenow, and Voinovich.
       Over the last few months, in anticipation of bill 
     introduction and during Committee markup, we convened 26 
     meetings with our Judiciary Committee colleagues to address 
     their concerns with the bill. During these deliberative 
     sessions, we addressed issues including disease categories, 
     award amounts, Fund sunset, and judgments and verdicts 
     pending at the time of enactment.
       After hundreds of hours of extensive analysis and 
     deliberation, we found we could accommodate many, if not 
     most, of the myriad issues raised by stakeholders and 
     Senators before formal introduction of S. 852. After 
     introduction, the Judiciary Committee held six markups 
     lasting over a month. During this bipartisan process, and 
     through continuing meetings, we were able to further resolve 
     a number of complex issues, including medical criteria, Fund 
     start-up, insurer allocation, the Equitas hardship issue, and 
     Fund contribution transparency. Indeed, the markup process 
     resulted in the Committee's acceptance of over 70 amendments 
     from Republican and Democratic members. After extensive 
     deliberation, the Committee discharged S. 852 on a solid 
     bipartisan vote of 13-5.


                                 S. 852

       We have sought an equitable bill which takes into account, 
     to the maximum extent possible, the concerns of stakeholders 
     and Senators. The bill establishes a privately-funded $140 
     billion trust fund that compensates asbestos victims through 
     a no-fault system administered by the Department of Labor. S. 
     852 in no way holds the taxpayer responsible for contributing 
     to the Fund. In fact, during markup, the Committee accepted 
     an amendment that explicitly absolves the federal government 
     from any funding obligations or liabilities with respect to 
     the Fund.
       Once established and capitalized through the private 
     contributions from defendant and insurer participants, 
     asbestos victims will simply submit their claims to the fund 
     through an administrative process designed to compensate them 
     quickly. Claimants would be fairly compensated if they meet 
     medical criteria for certain illnesses and if they show past 
     asbestos exposure.
       The major features of this bill reflect consensus on core 
     principles, but all are directed to ensuring fair and 
     adequate compensation to the victims of asbestos exposure:
       Funding: The size of the fund was a principal issue of 
     contention during the 108th Congress. Last October, Majority 
     Leader Frist and then-Democratic Leader Daschle agreed that 
     the Fund should be set at $140 billion, which has been 
     generally accepted as sufficient to ensure adequate payment 
     to victims and is now embodied in S. 852. The manufacturers 
     and insurers have agreed to pay that sum--a guaranteed 
     amount--into the trust fund.
       Removal of the Old Level VII's: Some members raised 
     concerns about compensating the so-called ``exposure only'' 
     Level VII lung cancers, fearing that this disease category 
     would create a ``smokers'' compensation fund. Without 
     sufficient markers to show a stronger causal connection 
     between asbestos exposure and lung cancer, this disease 
     category could have required $7 billion from the Fund. After 
     serious consideration, we removed this disease category from 
     the bill.
       No Subrogation: A key issue for to determine compensation 
     for asbestos victims has been workers' compensation 
     subrogation. Allowing for subrogation would permit insurers 
     to impose a lien on Fund awards recovered by claimants. The 
     value of an award to the claimant depends on whether the 
     claimant may have to pay a substantial amount of it to 
     others. To be fair to victims, claimants should be allowed to 
     retain and receive the full value of both their Fund awards 
     and workers' compensation payments.
       More Effective Start-Up: Perhaps one of the most difficult 
     issues was how pending claims in the tort system will be 
     treated upon S. 852's enactment. With general agreement that 
     if the fund was not up and running within a reasonable amount 
     of time, some or all pending claims could return to the tort 
     system. The bill as introduced provides for a 9 month stay of 
     claims for exigent cases and a 24 month stay for nonexigent 
     cases. Furthermore, the legislation creates a procedure 
     enabling exigent claimants to receive prompt payment even 
     during the initial startup period authored by Senator 
     Feinstein. Taking into consideration concerns raised by 
     victims, insurers, and defendant participants, Senators Kyl 
     and Feinstein worked through compromise language during the 
     markup process that greatly improves the start-up process.
       Sunset: The stakeholders generally agree that if the Fund 
     cannot pay all valid claims, a claimant's right to a jury 
     trial cannot be barred. But such a sunset should not occur 
     before there is an extensive and rigorous ``program review.'' 
     During markup, Senators Kyl and Leahy worked towards refining 
     the sunset procedures by enabling the Administrator to submit 
     recommendations to Congress regarding possible changes to the 
     medical criteria or the funding formula. In the event of a 
     sunset, the bill now allows claimants to bring their lawsuits 
     only in federal court or in a state court in the state in 
     which the plaintiff resides or where the exposure took place.
       Attorneys' Fees: Before S. 852 was introduced, and after 
     extensive deliberation with Judiciary Committee members, 
     agreement was reached on a 5% attorneys' fee cap for all 
     monetary awards received by asbestos victims within the Fund. 
     The nature of the claims process justifies this cap, for once 
     the fund is established, recovery is fairly straightforward 
     and there will no longer be a need for substantial and time-
     consuming attorney involvement. Moreover, fee caps in federal 
     compensation programs are fairly

[[Page 14054]]

     common. We are working on further refinements in the bill to 
     assist claimants in processing their claims through a 
     paralegal program that the Administrator will be authorized 
     to implement.
       Level VI Claimants: Members raised concerns about the 
     strength of the causal connection between asbestos exposure 
     and the development of cancer in areas other than the lungs 
     (e.g., colon, stomach, esophageal and laryngeal cancers). To 
     assuage these concerns, the bill commissions an Institute of 
     Medicine study to assess this causal connection, which will 
     come out no later than April 2006. The findings of the study 
     will become binding on the Administrator when compensating 
     asbestos victims for each cancer in this disease category.
       Silica Claims: We heard concerns that many asbestos claims 
     might be ``repackaged'' as silica claims in the tort system. 
     We also, however, heard concerns that liability for non-
     asbestos diseases not be abrogated simply because S. 852 
     becomes law. The stakeholders agree that this is an asbestos 
     bill, designed to dispose of all asbestos claims, but that 
     workers with genuine silica exposure disease should be able 
     to pursue their claims in the tort system. A hearing was held 
     on this issue on February 2, 2005, which established that 
     exposure to asbestos and silica are easily distinguishable on 
     x-rays and that markings from asbestos and silica disease are 
     rarely found in the same patient. Consequently, the bill 
     requires claimants, prior to pursuing a silica claim in the 
     tort system, to provide rigorous medical evidence 
     establishing that their injury was caused by exposure to 
     silica, and that asbestos exposure was not a significant 
     contributing factor to their injuries.
       Medical Screening: Some Committee members were concerned 
     about a medical screening program within the Fund. Although 
     earlier versions of the asbestos bill excluded such a 
     program, we concluded that one was necessary as an offset to 
     the reduced role of a claimant's attorney. It is reasonable 
     to have routine examinations for a discrete population of 
     high-risk workers as a matter of basic fairness. By 
     establishing a program with rigorous standards (such as a 
     provision offered by Senator Coburn requiring service 
     providers to be paid at Medicare rates), as has been done in 
     this bill, unmeritorious claims can be avoided with the fair 
     determination of those entitled to compensation under the 
     statutory standard. This program is vastly different from any 
     screening in the current tort system.
       Pending Claims and Settlements: Prior to bill introduction, 
     and as a result of the numerous stakeholder meetings, 
     agreement was reached on how the bill affects pending claims 
     and settlements in the tort system. The bill preserves: (1) 
     cases with a verdict or final order or final judgment entered 
     by a trial court; (2) any civil claim that, on the date of 
     enactment, is in trial before a jury or judge at the 
     presentation of evidence phase; and (3) written settlement 
     agreements, executed prior to date of enactment, between a 
     defendant and a specific named plaintiff, so long as the 
     agreement expressly obligates the defendant to make a future 
     monetary payment to the plaintiff and plaintiff fulfills all 
     conditions of the settlement agreement within 30 days.
       CT Scans: Unlike prior iterations of the asbestos bill, S. 
     852 permits greater use of CT scans. During markup, the 
     Committee accepted an amendment that commissions a study by 
     the Institute of Medicine to evaluate whether CT scans are 
     well accepted and reasonably reliable to diagnose certain 
     lung cancer claims. In addition, after extensive discussions 
     between Senators Leahy and Coburn, the Committee accepted an 
     amendment that calls on the American College of Radiologists 
     to establish guidelines for comparing claimants' CT scans.
       Transparency: Several members raised concern over the 
     specific sources of defendant funding. After numerous 
     briefing sessions from claims analysts and financial 
     projection experts, the Committee accepted an amendment which 
     provides that within 60 days after the date of enactment the 
     contributors to the Fund must submit to the Administrator 
     information sufficient to determine their contribution 
     levels. The Administrator must publish this funding 
     allocation information in the Federal Register within 60 days 
     of receipt and before the Fund can be deemed operational.
       Asbestos Ban: Despite the known danger involved with 
     asbestos, a number of products and processes still use 
     asbestos today. As Congress considers creating an alternative 
     compensation program to address past exposures to asbestos, 
     it is only sensible that we also prevent future asbestos-
     related illnesses from occurring by banning asbestos use. 
     Therefore, this bipartisan bill contains a ban on the 
     commercial manufacture, use and distribution of asbestos and 
     asbestos-containing products, originally authored by Senator 
     Murray. This provision was unanimously modified in Committee 
     last month by the adoption of Senator Kyl's amendment to 
     provide narrow exceptions to the ban for national security 
     purposes.
       S. 852 has benefited from a thorough process during this 
     Congress. This legislation is complicated, but it is both 
     integrated and comprehensive and reflects a remarkable and 
     widespread will to enact legislation to finally resolve the 
     asbestos crisis. On the state of a 20 year record, the choice 
     we are presented with is not between this bipartisan bill and 
     one that takes a dramatically different approach. The choice 
     is between this bipartisan bill and the continuation of the 
     present chaotic system which leaves thousands of victims 
     suffering from deadly diseases without compensation and 
     scores of companies threatened with bankruptcy.
           Sincerely,
     Arlen Specter.
     Patrick Leahy.

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